The economic theory of international business: a supply chain perspective

Abstract

Purpose: This paper aims to propose a way of addressing unresolved issues in international business theory.Design/methodology/approach: A new model of the multinational enterprise as a coordinator of supply chains is presented.Findings: This paper identifies a new market‐seeking strategy that is an alternative to conventional strategies, such as exporting, licensing and foreign direct investment, and analyses the conditions under which it will be adopted by firms. The new strategy involves the offshoring of production and the out‐sourcing of research and development, and is implemented through co‐operation between a source country firm and a host country firm.Originality/value: This paper presents a new way of modelling international business as a supply chain system, which can be easily extended in various ways.